Government plans to heal the wounds of financial disaster

Author: MP Rana

Indian Government is trying its hands at anything and everything to keep the country from any further damage due to Global financial disturbance. The attempts to bring back original growth rate of 9% calls for some reforms in Banking Sector, selling the non-profit units of public-sector, de-controlling in Industry and changing labor laws to name a few.

The annual GDP growth rate was 9.4% for 2005-06, 9.6% for 2006-07 and 9% in 2007-08. However, the rate for 2008-09 is expected to be much lower as returns from areas like agriculture, services and industry do not seem to be much healthy. Some of the forecasts for the index are 8.7%, from Center for Monitoring Indian Economy, 7.4% from Citigroup and 7.8% from National Council from Applied Economic Research.
	The planned moves are to materialize from next year onwards, in a gradual manner. To prevent the ideas from deviating in any way, proposals of constant check on the investment related issues and dynamicity of macro-environment are also there. Besides these, there are also possibilities of enhancing the FDI limit in private and rural agricultural banks to 100%, in green-field investments and that of selling equity ranging from 5-10%, in public sector undertakings such as Oil India and NHPC. These companies fall in ‘profit making non-navratnas’ bracket. To what extent are these successful is a thing to watch for.